Asset Management Digitalisierung

Digitization in Asset Management – a must?

This question seems to have a rhetorical character and we would assume that all decision-makers would answer with a courageous yes. But this is by no means the case. Many employees in the operative departments or IT report a standstill here because a sponsor like Portfolio Management is missing.

On the other hand, the fund industry can look back on some very stressful years with overwhelming regulatory requirements, including costs of which have had a direct impact on margins. However, not only the balance sheets have suffered, but also human capital. Unfortunately, the stress level in the companies could not be kept at an acceptable level and many employees had to take compulsory breaks due to illness.

As a result, we encounter overloaded employees and quality deficiencies in the process chain. Both in turn generate direct costs for troubleshooting and a damage to the company’s reputation in the event of such incidents becoming apparent to the outside world.

The consequences of deferred innovation

The technical standstill will place an even greater burden on or demotivate the operating employees and exacerbate the current problem.

One of the most popular buzz words these days is AI. In personal discussions I learn however that with many places the condition for this – the digitization – still lies in the bad. Information is partly still transported with the fax, invoices are written with serial letters and important documents are stored several times decentralized in personal E-Mail accounts. All this is not audit-compliant, error-prone and does not provide a database for AI.

Digitization is no longer a resource problem

IT managers and specialist departments agree that the new systems are necessary for process improvements, but are currently shying away from projects in the 6- or 7-digit Euro range. In addition, the project work of 3-9 months would add to the daily burden on the specialist departments. The load on the IT/Orga units often allows only the “run”; there is hardly any capacity left for the “change”.

Thanks be to heaven, the approaches to software development have changed decisively and the cloud is no longer evil even for financial institutions. Most of the new systems were developed with an agile approach, can be implemented extremely quickly and are flexible in adaptation and, of course, cloud-based.

Intuitive, agile and secure in the cloud

The attractiveness of these modern systems is characterized by an intuitive interface with training costs of only a few days. User-friendly functions allow the specialist departments to independently adapt system processes to their individual needs. The user is automatically informed as soon as he has to intervene or a process has been completed (Workflow Management). Time-consuming release upgrades or bug fixes are a thing of the past. The central application is permanently monitored with regression tests, and changes to the software are made imperceptibly for the user on a daily basis – keyword: Continuous Deployment.

Low project risk

You will hardly find any glossy brochures for modern solutions; instead, the providers will show you the functionality that you can immediately use directly on the system. For the customer, the project risk is minimized and the young companies save costs. It is much more attractive to show the solution live and to present the latest developments.

Implementation times range from a few days to a few weeks. Months are hardly spoken of anymore. The required capacity on the part of IT is minimal to negligible when we talk about browser-based systems. Usually only a file has to be generated and the connectivity to the cloud application has to be established. An up-to-date Internet browser is then all you need.

Manageable financial risk

The initial costs for start-up solutions are only a fraction of the costs we knew from previous projects. Many young companies are also very flexible in their contracts and allow termination after the first year. Thus, a decision by the specialist department should obviously be easy, as there is neither a major project risk nor a significant financial risk.

Unfortunately we do not yet see any adjustment in the purchasing processes of the companies and an evaluation with consultants over several months does not fit to an agile and transparent system solution with manageable costs. This is where companies have to rethink. In addition to the considerable costs of an evaluation with many stakeholders, the lost benefit for the specialist department weighs much heavier.

At this point, I can only recommend that both parties agree on rational standards in the areas of compliance, IT security and processes that can be compared in the shortest possible time. In the area of IT security, the major cloud service providers already meet many ISO standards and have availability rates and process documentation that hardly any financial institution can provide today.

Example: humbee – one of the most innovative products on the market

As an example of a system that meets all the above criteria, I would like to mention the application humbee for case management. (https://humbee.de)

This system structures and documents your daily operations. Recurring tasks appear automatically with a lead time and each processing step is documented. Documents are stored centrally in the processes and e-mails on cc: become superfluous, since the current documents are stored centrally in the system.

There is no need to ask colleagues questions or search for documents. The department now has transparency about outstanding tasks and colleagues can directly process or address critical processes. Since the developers of the system own DMS genes, a powerful document management system with corresponding archiving options is already included.

From my point of view one of the most innovative products on the market, which takes care of the enormous load of the employees and at the same time gives the management an overview of the critical tasks.

About the author

After completing his studies in Mainz with a degree in economics, Heiko Klag worked as an analyst at a foreign bank in Frankfurt. This was followed by two positions at Anglo-Saxon providers of core banking systems, where he initially worked as a business consultant and later as an account manager. In 2006 he moved to a system provider on the buy side in the area of business development. In this area, he is now mainly concerned with process optimization and various operational issues. For him, consulting means understanding the customer and proposing holistic solutions.

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